Prime Minister Tony Abbott has delivered a blunt warning to Russia it will be shunned by the international community unless it accepts some responsibility for the Malaysia Airlines flight MH17 crash and backs a fully transparent international investigation into the tragedy.

Mr Abbott said it appeared the plane had been shot down by Russian-backed rebels in Eastern Ukraine and that he was deeply unsatisfied with Russia's attempts to blame Ukraine for the disaster.

The crash – which Mr Abbott described as a crime - has claimed an estimated 298 lives, including at least 28 Australians.

“I stress: it is not an accident, it is a crime, and criminals should not be allowed to get away with what they've done,” Mr Abbott said. “So, there has to be a full impartial international investigation and Russia should certainly not be allowed to stand in the way of that just because the aircraft has come down over territory controlled by Russian-backed rebels.”

After being summoned to a meeting with Foreign Minister Julie Bishop on Friday afternoon, Russian Ambassador Vladimir Morozov denied to Ms Bishop that Russian-backed separatists had shot down the plane.

That response has angered the Australian government.

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“I have to tell you that the initial response of the Russian ambassador was to blame Ukraine for this and I have to say that is deeply, deeply unsatisfactory,” Mr Abbott said. “We all know that there are problems in Ukraine.

“We also know who is very substantially to blame for those problems, and the idea that Russia can somehow say that none of this has anything to do with them because it happened in Ukrainian airspace frankly does not stand up to any serious scrutiny.

“I want to say to the Australian people that as far as I am concerned, when you have a situation where Russian-backed rebels appear to have killed Australians using, it may well turn out to be, Russian-supplied heavy weaponry, Australia takes a very dim view indeed and we want the fullest possible investigation.”

Mr Abbott said it was "very fair" to ask whether Russian President Vladimir Putin will still be welcome at the G20 leaders meeting in Brisbane later this year if Russia does not fully co-operate with any investigation.

"I just want to say that it is absolutely imperative if Russia is to maintain any international standing at all that there be complete Russian co-operation with this," he said. "No provocation, no excuses, no blame-shifting, no protecting of people who may be backed by Russia but who may have been involved in this terrible event."

Following news of the crash, Mr Putin had said Ukraine should bear responsibility for the downing of the plane because it had resumed a military campaign against separatists.

"I want to point out that this tragedy wouldn't have happened if there was peace in this land, or at least if fighting hadn't resumed in the southeast of Ukraine," he said. "And undoubtedly, the state on whose territory this happened is responsible for this awful tragedy."

After Mr Putin expressed his condolences to Dutch Prime Minister Mark Rutte in a phone conversation on Friday, the Kremlin released a statement saying: "The head of Russia stressed that the tragedy once again highlighted the need for an urgent peaceful settlement of the most acute crisis in Ukraine and noted there is a need for a thorough and objective investigation of the air crash."

Mr Abbott appeared sceptical, however, that Russia would assist the investigation.

"[B]ased on what we're hearing from Russia, it's hard to have much confidence that there will be the kind of open and honest and transparent cooperation that you would expect, and this really is a test for Russia ... So far the signs are not especially promising, but if there is sufficient international pressure for a full and impartial inquiry, hopefully the Russians will realise that their whole standing in the world is at risk here."

Earlier on Friday Mr Abbott told Parliament: “The bullying of small countries by big ones, the trampling of justice and decency in the pursuit of national aggrandisement, and reckless indifference to human life should have no place in our world.”

“This is a grim day for our country and it’s a grim day for our world,’’ he said.

Flags will be flown at half-mast at all Australian government establishments on Saturday as a mark of respect to those who died in the crash. At a future date there will be a National Commemorative Service and a National Day of Mourning.

Mr Abbott confirmed the plane's passengers included 155 from the Netherlands, 43 from Malaysia, 28 from Australia, 12 from Indonesia, nine from the United Kingdom, four from Germany, four from Belgium, three from the Philippines and one from Canada. There are still 41 whose nationalities remain unconfirmed.